Italy plans at least €15bn package to tame energy costs

(EurActiv, 4 Nov 2022) Italy plans to set aside at least €15 billion in its 2023 budget to soften the impact of sky-high energy costs on firms and families, two government sources told Reuters on Thursday (3 November).

Prime Minister Giorgia Meloni’s right-wing government will raise next year’s budget deficit to 4.5% of gross domestic product (GDP), from the 3.4% projected in September by the previous administration of Mario Draghi. This would free up budget room for expansionary measures worth some €21 billion.

The resources available to support the economy will increase if current trends lead to a lower deficit next year than the 3.4% of GDP predicted two months ago, the sources said.

Rome also aims to collect additional funds by cutting part of almost €9 billion earmarked in 2023 for a “citizens’ wage” poverty relief scheme.

The move comes as Italy’s new Prime Minister, Giorgia Meloni, made her first visit to Brussels on Thursday (3 November) where she met with the presidents of the European Commission and the European Council, Ursula von der Leyen and Charles Michel.

But arguably the most important meeting was the lunch she had with EU economics commissioner Paolo Gentiloni.

Gentiloni, himself a former Italian premier, is in charge of implementing the EU’s Stability and Growth Pact, which limits government deficits in eurozone countries to 3% of GDP. The pact was suspended during the COVID-19 pandemic and the Commission decided to further postpone the reinstatement of fiscal discipline until 2024 because of the war in Ukraine.

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EurActiv, 4 Nov 2022: Italy plans at least €15bn package to tame energy costs